Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
 
Capitalize — To treat certain expenditures as capital expenditures for Federal income tax computations.

Cracking — The process of breaking down the larger, heavier and more complex hydrocarbon molecules into simpler and lighter molecules, thus increasing the gasoline yield from crude oil. Cracking is done by application of heat and pressure, and in modern time the use of a catalytic agent.

Coal gasification — The chemical conversion of coal to synthetic gaseous fuel.

Capital Funds — Monies invested in a business for use in conducting the operations of the business.

Carried Interest — A fractional working interest in an oil and gas lease that comes about through an arrangement between co-owners of a working interest.

Cement squeeze — Forcing cement into the perforations, large cracks, and fissures in the wall of a borehole to seal them off.

Clean oil — Crude oil containing less than 1 percent sediment and water; "pipeline oil", oil clean enough to send through a pipeline.

Cuttings — Chips and small rock fragments brought to the surface by the flow of drilling mud as it is circulated and examined by geologists for oil content.

Casinghead — The portion of the casing that protrudes above the surface and to which control valves and flow pipes are attached.

Casinghead gasoline — Highly volatile, water-white liquid hydrocarbons separated from casinghead gas.

Crude oil equivalent — A measure of energy content that converts units of different kinds of energy into the energy equivalent of barrels of oil.

Cavings Rock — Fagments that break off from the walls of a borehole and fall into the borehole during drilling operations.

Coal liquefaction — The chemical conversion of coal to synthetic liquid fuel.

Condensate — Liquid hydrocarbons separated from natural gas, usually by cooling.

Capital expenditure — An expenditure intended to benefit the future activities of a business, usually by adding to the assets of a business, or by improving an existing asset.

Cement — Fluid cement is mixed at the surface, pumped to the bottom of a cased well, forced to flow around the lower end of the casing and up into the space between the casing and the borehole. When the cement solidifies (sets), it holds the casing in place, and provides support.

Casing Pipe — used in oil wells to reinforce the borehole. Sometimes several casings are used, one inside the other. The outer casing, called the "surface pipe,' shuts out water and serves as a foundation for subsequent drilling.

Completed well — A well made ready to produce oil or natural gas. Completion involves cleaning out the well, running steel casing and tubing into the hole, adding permanent surface control equipment, and perforating the casing so oil or gas can flow into the well and be brought to the surface.

Confirmation well — A well drilled to "prove" the formation encountered by an exploratory well.

Crude oil — Liquid petroleum as it comes out of the ground. Crude oils range from very light (high in gasoline) to very heavy (high in residual oils). Sour crude is high in sulfur content. Sweet crude is low in sulfur and therefore often more valuable.

Conveyance — Legal term for transferring the title of a property from one party to another, typically by deed.

Commissions — Payments to qualified agents of the sponsor of a limited partnership, for selling interests in it to investors. Commissions may take the form of a percent of partnership interests sold, an oil and gas interest, or stock in the sponsor's company.

CO2 injection — A secondary recovery technique in which carbon dioxide (CO2) is injected into wells as part of a miscible recovery program.

Circulate — To pump drilling fluid into the borehole through the drillpipe and back up the annulus.

CAOF (calculated absolute open flow) — A figure representing a gas well's theoretical producing capability per day.

Conventional energy sources — Oil, gas, coal, and sometimes nuclear energy, in contrast to alternative energy sources such a solar, hydroelectric and geothermal power, synfuels, and biomass.

Capital costs (Oil & Gas Tax Usage) — For Federal income tax purposes, the costs of capital expenditures which may be recovered by deduction against income (through depreciation and depletion).

Casinghead gas — Natural gas produced from an oil well, as opposed to gas produced from a gas well.

Capital asset — An asset acquired as an investment, for the purpose of creating a product or service intended to be used in the activities or operations of a business.

Choke — An orifice installed in a pipeline at the well surface to control the rate of flow.

Cogeneration — The combined production of electrical or mechanical energy and usable heat energy.

Connate water — The water present in a petroleum reservoir in the same zone occupied by oil and gas considered by some to be the residue of the primal sea, connate water occurs as a film of water around each grain of sand in granular reservoir rock and is held in place by capillary attraction.

Christmas tree — An assembly of valves, gauges, and chokes mounted on a well casinghead to control production and the flow of oil to the pipelines.

Cable drilling — A method of well-drilling that employs a reciprocating, rather than a rotary, motion to penetrate rock. In the nineteenth century, until Drake's time, power was supplied by men. Drake used a steam-powered cable rig. Today, cable rigs are powered by gasoline or diesel engines.

Common carrier — A person or company in the business of transporting the public or goods for a fee. In the industry, a person or company engaged in the movement of petroleum products, like a public utility.

Core — Samples of subsurface rocks taken as a well is being drilled. The core allows geologists to examine the strata in proper sequence and thickness.

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